New foreclosure filings in the Chicago metro area have returned to first-quarter 2009 levels after a slowdown in the second quarter, says the latest Woodstock Institute analysis of regional foreclosure activity. This sharp increase likely reflects federal and state interventions that delayed new filings in the second quarter until the third quarter.
The report also found that the rate of new filings is increasing in collar counties and decreasing in Cook County. Cook County saw a 4.6 percent decrease in new filings from last year, primarily in the City of Chicago (down 9.6 percent) and South Cook County (down 25.3 percent). All collar counties saw at least a 53 percent increase in new filings from last year. Kane County experienced a 96.6 percent increase in new filings—the biggest increase of the six-county region.
This increase in the suburbs reflects a broader trend of the foreclosure crisis shifting to middle- and higher-income communities. As previous Woodstock research shows, subprime loans were largely concentrated in the City of Chicago and South Cook County. National data indicate that foreclosures are moving from the subprime market to the prime market. Additionally, most neighborhoods that have seen recent foreclosure declines historically have had long-term foreclosure problems.
“There are simply fewer and fewer mortgages to foreclose on in lower-wealth communities,” says Geoff Smith, Vice President of Woodstock Institute. “That does not mean, however, that the foreclosure crisis is over in these neighborhoods. Lower-wealth neighborhoods continue to have high levels of foreclosure and face challenges associated with high concentrations of vacant properties, such as increases in violent crime and dropping property values.”